In the latter half of 2023, Singapore's luxury property market saw some changes. While sales volume declined, prices remained relatively stable. During this period, there were 9 transactions for Good Class Bungalows (GCB) totaling SGD 202.05 million, marking a 64.9% decrease in transaction volume compared to the first half of the year, which saw 14 transactions totaling SGD 575.27 million. While this indicates a certain slowdown in the market, the stability of property prices reflects market resilience.
Several factors contribute to these changes, including rising interest rates, global economic uncertainty, and ongoing anti-money laundering efforts since August 2023. These factors have led to a cautious approach from buyers and developers, resulting in a decrease in transaction volume. However, the average price of GCBs continues to trend upwards, declining from USD 2,631 per square foot in the first half of 2023 to USD 1,963 per square foot in the latter half, a decrease of 25.4%, but representing an overall price increase of 23.8% year-on-year.
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In the luxury condominium segment, a similar trend is observed. In the latter half of 2023, there were 63 luxury condominium transactions totaling SGD 579.65 million, down from 92 transactions totaling SGD 964.67 million in the first half of the year. This decline is partly attributed to the doubling of Additional Buyer's Stamp Duty (ABSD) for foreigners to 60%, leading to increased caution among buyers. However, despite the decrease in transaction volume, the average price of luxury condominiums continues to rise, reflecting sustained demand for high-end properties.
In the Sentosa Cove property market, transaction volume also experienced a downward trend in the latter half of 2023. Two bungalows were sold, totaling SGD 35.66 million, compared to seven bungalows sold in the first half of the year, totaling SGD 139.39 million, a decrease of 74.4%. Despite the decrease in transaction volume, prices remain relatively stable, with the average price in 2023 increasing by 15.8% year-on-year to USD 2,470 per square foot.
While the market shows a certain downward trend overall, stability in property prices and long-term appreciation prospects persist. Singapore, as a commercial hub, with its prime location and strong fundamentals, will continue to attract investors, supporting stable growth in the luxury property market. Additionally, if interest rates ease in the future and the economy recovers, the price gap between buyers and sellers may narrow, leading to a rebound in market activity.
